QUESTION 1

1. On July 15, XYZ, Co. Sells SAR 950 of merchandise on credit to ABC, Co. The correct entry to record

   	a.	Debit Account Receivable Credit Sales
   	b.	Debit Cash Credit Sales
   	c.	Debit Sales Credit Accounts Receivable
   	d.	Debit Sales Credit Cash

2. QUESTION 2

3. In the balance sheet, allowance for doubtful accounts would be:

   a.

   Not reported in balance sheet

   b.

   Divided by accounts receivable

   c.

   Added to accounts receivable

   d.

   Subtracted from accounts receivable

   QUESTION 3

   DD Company estimates from past experience that about 2.5% of credit sales become

   uncollectible. If net sales are $720,000; and credit sales are $500,000 in 2015 then bad debt

   expenses would be:

   a.

   13,400

   b.

   12,500

   c.

   14,700

   d.

   18,000

   QUESTION 4

   Allowance method to account for bad debts is:

   a.

   There is no risk associated with estimating bad debts expenses

   b.

   Does not require recording actual write-off and recovery of bad debts

   c.

   Inaccurately reports accounts receivable

   d.

   Closely follows the matching principle because bad debts are assigned to expenses in the same

   accounting that they occur

   QUESTION 5

   Uncollectible amounts from current customers are known as:

   a.

   Impaired debts

   b.

   Bad debts

   c.

   Good debts

   d.

   Accounts receivable

   QUESTION 6

   In the direct write-off method, to account for bad debts, which account is credited:

   a.

   Loss account

   b.

   Accounts receivable

   c.

   Bad debts expenses

   d.

   Allowance for doubtful accounts

   QUESTION 7

   The interest on a SAR10,000, 9%, 90-day note receivable is

   a.

   SAR225.

   b.

   SAR900.

   c.

   SAR75.

   d.

   SAR150

   QUESTION 8

   XYZ Company receivables at year end were SAR100,000. The company estimates

   uncollectible accounts at 1% of receivables. XYZ Co. allowance account had a SAR300 credit

   balance. What is XYZs bad debts expense for the year?

   a.

   SAR1300

   b.

   SAR300

   c.

   SAR1000

   d.

   SAR700

   QUESTION 9

   The two methods of accounting for uncollectible accounts are the direct write-off method and the

   a.

   Accrual Method

   b.

   Net Realizable Method

   c.

   Bad Debt Method

   d.

   Allowance Method

   QUESTION 10

   _______are written promises to pay a sum of money on a specified future date.

   	a.	Accounts payable
   	b.	Accounts Receivable
   	c.	Notes payable
   	d.	Notes Receivable